Posted on 24/10/2017

The provisional Local Government settlement for 2018/19 was announced recently, meaning that each Local Authority in Wales has received indication of the funding they are proposed to receive in the next financial year. Looking at the overall Welsh Government Budget, it appears that Welsh Councils are again set to see our funding reduced by 0.5% next year and a further 1.5% in 2019/20. In RCT, our funding will reduce by 0.2%.

Considering Wales’ funding has reduced by 7% in real terms since 2010, equating to a staggering £1.2bn, the Welsh Government have done their very best to mitigate the impact on Council services, and Rhondda Cynon Taf has received a reasonable settlement in these circumstances. The impact of austerity means that we must still meet the demands placed on our services, despite an actual year on year decrease in our funding. The cuts being imposed across the UK by the Westminster Government mean that the Welsh Government are in an impossible situation.  They, like every other public sector organisation face the unenviable task of balancing an ever shrinking Budget across all of Wales’ devolved responsibilities, including health, education and economic development.

We have consistently been proactive in our approach to managing the reductions in funding we have received here in RCT, meaning that, despite the challenges we face, we have been able to create opportunities to invest and re-shape the way we deliver services, and this is something we will continue to do over the course of this Council term.  We will, however, reach a point when these options and opportunities are no longer available to us and tough decisions could become unavoidable. 

Crucially, the Chancellor has the opportunity to address this issue when he presents the UK Government’s Budget in late November. Austerity as a policy is inflicting a devastating impact on the public sector across the UK, and there is an opportunity on the 22nd November for the UK Government to change direction and ensure that all levels of the public sector can begin to move forward.  At the Council meeting on 18th October, I successfully forwarded a Motion to Council calling on the Chancellor to use the November Budget to depart from austerity and give our public services some much needed funding. I can only hope that the continued calls from the public, politicians, trade unions and economists are heeded.

This is one of the reasons that I also supported a recent Motion at Council to lift the public sector pay freeze.  As the largest local employer, the work that our staff to do is most certainly valued, and the continuation of the 1% cap imposed by the UK Government in 2010 is having a profound impact on families across RCT, with the real terms fall in pay estimated to be 21%.  The harsh reality is that lifting the pay cap is the responsibility of the Westminster Government, and that has been reinforced by the latest Budget settlement.  Cutting funding from the core Welsh Budget would have a catastrophic effect on the delivery of key frontline services, with £60m alone likely to come from the health budget.   

You will have heard many of my fellow Council Leaders of all political persuasions reference the potential need for Council Tax increases to mitigate the potential cuts we anticipated in funding as part of the settlement this week.

As a Council, we recognise the impact that Council Tax raises can have upon residents and therefore we will seek to keep any increases to an absolute minimum.  Last year, the Council Tax increase in Rhondda Cynon Taf was the second consecutive lowest ever increase locally, and it was also the second lowest in Wales.

Against a backdrop of austerity and reducing funding, Council Tax has a role to play in the wider strategy to deliver a balanced Budget, but it is certainly not the first option that we consider in addressing this huge challenge. Now that we have an indication of our funding through the Provisional Local Government Settlement, we can shortly prepare to once again consult extensively with the public on the level of Council Tax increase to be proposed as part of our wider 2018/19 Budget strategy approach.

Despite the need to address continually reducing funding against an ever increasing demand on our services, we will continue to invest in priority areas, particularly where, over the longer term, the investment will make the delivery of our key services more sustainable.  The way we provide many of our services has not changed for a generation or more, despite the needs of residents changing significantly during this time.  Evaluating how we do things moving forward will be fundamental, not only because of the financial challenges presented, but because the needs and expectations of residents are also evolving.

Posted on 24/10/2017